June 9th, 2014, 19:05 PM
Amazon launches PayPal competitor
The company launched a service Monday known as Amazon Payments that allows consumers to use their Amazon (AMZN, Tech30) accounts to send and receive money and shop online at "thousands of sites other than Amazon." It's accessible on both desktops and mobile devices.
For businesses, Amazon is selling the service as a way to take advantage of its security and user data while saving time for new customers. There's no recurring fee for retailers to use the platform, though Amazon plans to take a standard cut of 2.9% from those businesses, plus $0.30 for each transaction of $10 or more.
With more than 244 million active customer accounts, Amazon already has a massive base of potential users for the service. The effort represents a new front in its assault on eBay, which owns online payments service PayPal.
PayPal launched a new marketing effort last month touting its capabilities in mobile payments and money transfers. It currently boasts roughly 148 million active accounts.
Nathalie Reinelt, an analyst with Aite Group, said Amazon Payments would likely benefit from the company's strong brand recognition and reputation for security.
"I think it's smart for Amazon to do this and expand their footprint in the one-click payment space," she said.